I don't buy it. When they are saying it was that good, I know we are near the end of something.

 

But will it get adjusted down, again, in a couple months?

 

Isn't that the truth! In my economics class we would argue about the GDP report. Now way was it as high as the Gov said and later, it would be readjusted and barely show growth. Not believing this one either.

 

Good news? We can't let that stand!

 

It is most certainly is good news. However considering the contraction of the first quarter and the historically low work participation rates you'll have to forgive me if I don't do a victory dance.

 

Maybe if you include drugs, prostitution, and payments for housing illegal aliens. The numbers coming out of this government are about as believable as the ones that came out of the Kremlin 40 years ago.

 

It is difficult for me to believe that we had a nearly 7% increase from the first quarter report which started out a barely positive and then was adjusted down to -2.9%. These kind of swings are not normal at all, but of course we are no longer in a 'normal' market.

From where I sit there is just not anything that indicates an improving economy irregardless of what the .gov numbers say.

 

I think a significant part of that was the weather though. January and February were pretty bad and had an impact.

 

I'm not a smart guy..but questions arise around GDP...as a measure...

Sum total of market value of final goods and services produced in a country

and this is not a smash on the current leadership...but I wonder about how they measure or if they consider actual revenue against that GDP..

in other words...if Ford has a high finished good number, but most of it's components are offshore...how much real profit stayed stateside.

in my case.. I work for a major bank...we actually have had a solid year , making a good profit...only problem, the Feds found ways to place fines against the bank so that in the end we made nothing, even lost money that we had to cough up to the Feds...and if it was going back to those "injured" during the housing bust...ok..that'd be good..but the real math is only about 6% of those billions in fines ever gets back to the street..the rest is absorbed by this monstrous govt.

my personal small side biz is having a good year as well, gross $ are up there comparable to pre-9/11..albeit the clientele have changed from the big corp folks to smaller entrepreneurs...but the reality is, gas is double, the weaker dollar means my inventory is considerably more expensive to buy, and other consumer price points are far far above the "inflation" index.... if they adjust for say 4% inflation, but the reality for me is that my consumption costs are at a 60% increase...?...again, I don't now econ stuff..it's been since the 70s college era that i took Price theory and other econ courses as part of my college major...
All I know is I'm 38yrs business exec working for #6 of the Fortune 500, and successful owner of a side biz that's 12yrs into a great run...and I'm tellin you.. I'm still falling behind year over month

 

in my case.. I work for a major bank...we actually have had a solid year , making a good profit...only problem, the Feds found ways to place fines against the bank so that in the end we made nothing, even lost money that we had to cough up to the Feds...and if it was going back to those "injured" during the housing bust...ok..that'd be good..but the real math is only about 6% of those billions in fines ever gets back to the street..the rest is absorbed by this monstrous govt.

Bingo!! Big...

You may pass GO and collect your $200 dollars of FRN's...:thumb:
After 25 years of being in business the size and burden of Government is the problem....Period end of conversation ...

 

this makes sense, if you take just one sector into account as an example the arms industry production after sandy hook was doubled and now there is an inventory glut, also retailers buying into the ''recovery'' sunny days are here again blather and are now struggling....sears and k-mart are good examples of retail chains who cant off load their inventory.

''As we showed in December of 2013, where the scramble to accumulate inventory in hopes that it will be sold, profitably, sooner or later to buyers either domestic or foreign, is most visible, is in the data from the past 4 quarters, or the trailing year starting in Q2 2013 and ending with the just released revised Q2 2014 number. The result is that of the $675 billion rise in nominal GDP in the past year, a whopping 52%, or over half, is due to nothing else but inventory hoarding.''

http://www.zerohedge.com/news/2014-...-07-30/deja-vu-gdp-stunner-over-half-us-growth-past-year-inventory-accumulation

 

FWIW:

ZH is throwing out the theory that it's a giant increase in inventories & investment that caused the GDP to go up this much, after a pretty good negative quarter (supposedly due to the weather). Hoarding and prepping, in other words.

I will say, that I'm starting to persuade my company to keep a bit more raw materials in stock (to hedge against price increases) after more than one conversation on the precarious and volatile economy and potential for supply disruptions. It's not the kind of stuff that has an expiration date or goes bad.

But I find it hard to believe that inventories are that far up right now across the board. If that were the case: wouldn't there be some price decreases or sales?

 

I will say, that I'm starting to persuade my company to keep a bit more raw materials in stock (to hedge against price increases) after more than one conversation on the precarious and volatile economy and potential for supply disruptions. It's not the kind of stuff that has an expiration date or goes bad.

Smart

 

Sacajawea, those comments are interesting given the record amount of stock buybacks going on right now. Channel stuffing, repurchases AND investment???

A few quotes from the report:

"Disposable personal income increased $192.7 billion, or 6.2 percent, in the second quarter,
compared with an increase of $152.1 billion, or 4.9 percent, in the first. Real disposable personal
income increased 3.8 percent in the second quarter, compared with an increase of 3.5 percent in the first."

" Personal outlays increased $138.8 billion in the second quarter, compared with an increase of
$76.1 billion in the first.

Personal saving -- disposable personal income less personal outlays -- was $682.9 billion in the
second quarter, compared with $629.0 billion in the first.

The personal saving rate -- personal saving as a percentage of disposable personal income -- was
5.3 percent in the second quarter, compared with 4.9 percent in the first."

" The change in real private inventories added 1.66 percentage points to the second-quarter change
in real GDP after subtracting 1.16 percentage points from the first-quarter change. Private businesses
increased inventories $93.4 billion in the second quarter, following increases of $35.2 billion in the first
quarter and $81.8 billion in the fourth quarter of 2013."

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

 

What a bunch of hooie....

Inventory replenishment has accounted for 60% of Q1 and Q2 GDP... and inventory growth/loss has nothing to do with GDP - because GDP is a representation of spending, not inventory accumulation.... so if we strip out the inventory component we get a clearer picture... so..

4.0 GDP - 1.66 Inventory growth = 2.34 GDP....

Q1 less the Q1 inventory number is -0.9 GDP (instead of -2.9)

That puts the last 2 quarters GDP averaging around 1%..... :thumb:

If the general consensus of economists is that the accepted benchmark for "treading water" is 3% annual GDP growth...

then we're drowning....

 

What a bunch of hooie....

4.0 GDP - 1.66 Inventory growth = 2.34 GDP....

Q1 less the Q1 inventory number is -0.9 GDP (instead of -2.9)

That puts the last 2 quarters GDP averaging around 1%..... :thumb:

If the general consensus of economists is that the accepted benchmark for "treading water" is 3% annual GDP growth...

then we're drowning....

I cannot help but think about a point made in the book of a Fiat Currency
economy in it's last stages gasping for breath, the author makes a point of how the business cycle tends to be spasmodic?? I have been dealing with this for more than 3 or 4 years now ( Home Building )...Just a thought worth mentioning??

 

Well, GDP = Gross Domestic Product...

so, buying rice or steel in order to "save" it (for whatever reason) at the same time is spending. In that sense, I can see the inventories being counted. But your point about rebuilding the inventory from previous quarter drawdowns makes a lot of sense to me.

I guess I'm seeing a possible change to "just in time" manufacturing processes popularity and a shift - however small - to more of a "put it back for a rainy day" mindset. That could just be wishful thinking, too.

I wonder, at what number would those inventories be considered a "surplus"?

 

it is spending.. but economists look at "Final sales" as a more accurate indicator.. Final sales excludes inventories...

 

Bunch of hog wash, nothing they publish is worth more than lining a bird cage with. All smoke and mirrors with a good bit of bread and circuses thrown in.

 

I look at GDP numbers with a huge amount of skepticism.

 

Several here have made the bold claim that the GDP numbers are false but gave little evidence to that effect.

I'm of the position that I believe these numbers are real -- BUT -- the growth is artificial. Hyped-up Miracle-Gro hopium growth. Growth that lacks a substantive foundation. Growth which will come crashing down in the future.

QE has worked, for now, but dear God, what about our grandchildren?

 

Several here have made the bold claim that the GDP numbers are false but gave little evidence to that effect.

They won't
They base their assessment of the economy on their local, anecdotal observations and hasty generalizations
And most have never taken a Probability and Statistics class...I suspect...

 

if you average out the last two quarters it's only 1% per quarter. doesn't sound earth shaking to me.

 

U.S. Second-Quarter GDP Expands at 4.0% Rate
Economy Grew at Best Six-Month Stretch in 10 Years in Second Half of 2013

Read more: http://online.wsj.com/articles/second-quarter-gdp-expands-at-4-0-rate-1406723867

More time to prep :thumb: : What are your thoughts?

If I read the chart correct then in fact it did not grow at a 4% rate. Instead it grew at a 6% rate, you must overcome the deficit growth factor of - 2%.

The Obama admin has been spinning phony numbers for almost 6 years, I don't believe the 4% number and I sure don't buy into a 6% growth rate.

 

I don't think you are reading it right. It is 4% growth, not 6% growth. A better argument that would be that it would be approximately 2% growth from the last quarter last year.

 

Let's see what the adjustment says, I don't trust it. I know to many people who are unemployed and just holding on by their finger nails

 

Can we all call BS at the same time.

 

4%? Fantastic! (as they teach you to say in charm school)

(It's an old joke; if you haven't heard it, someone will tell it)

 

Pffffttttt...

It's a combination of cooked books, fuzzy math, and statist economic controls. Anyone remember the recession of the '80's? A person could get a 16% return on a certificate of deposit during this period. Now, with The Fed artificially holding interest rates down to 0 (when they should be high) everyone is forced to speculate in the stock market or LOSE 7-11% on their savings to inflation as they print fiat currency just as fast as the presses will run... which accounts for the record highs of the Dow they keep crowing about and pointing to.

 

I'd be encouraged if we were moving in the direction of living within our means as a nation, as a government, and as individuals. As long as we're fueling our "recovery" by binge spending and running up the debt and printing money and holding interest rates artificially low, we're merely lurching toward the next crisis. Some optimists point to the decrease in government borrowing, but I have not seen any projections that show this trend continuing; all the factors are in place to make the debt rise again.

 

The only way 4% can be explained is they only rolled one of the pair of dice.

 

if romney was prez = this would be great news
since obama is prez = its a LIE!

These losers just cant handle any positive news under obama, whether its housing, jobs, GDP etc. In fact, theyd happily sabotage the economy just to beat obama. It is sooooo predictable.

 

I noticed in 2008 when it was apparent that Obama had a really good chance of winning the election the economy bombed suddenly. Conspiracy? Maybe.

You're right though. It's one thing to make arguments against the cost of Obamacare, but to turn everything in to an attack against the guy is pathetic. As a rational person Its really easy to see when someone is being overzealous. It really turns me off of their opinion and they cause more harm to actual arguments against his policy.

 

It may have changed but at one time dealers were required to take a certain number and mix of cars.

When a person has a reputation for telling the truth, people tend to believe him. Obama has EARNED a reputation for being dishonest.

Markets tend to be about six months ahead of event expectations good or bad. Then after the event occurs if as expected there is a counter bounce in the other direction.

 

It may have changed but at one time dealers were required to take a certain number and mix of cars.

When a person has a reputation for telling the truth, people tend to believe him. Obama has EARNED a reputation for being dishonest.

Markets tend to be about six months ahead of event expectations good or bad. Then after the event occurs if as expected there is a counter bounce in the other direction.

I felt that was years ago, now, he is just a FRIGGIN LIAR.

 

Im finding the 4% hard to believe. Like Trent said earlier though, i am looking at it at the purely micro and regional level with my companies. So take what i say with a grain of salt.

I know the various businesses we manage for, those revenues are expected to grow at sub 2%, whereas i am starting to see some significant inflation pressure in things like food stuffs and supplies. Energy though has remained flat to a slight decrease for me.

What is really killing us right now is two categories. Governmental fees/taxes (which i do not think factor into GDP). That is growing at a whopping 6% per year driven by school taxes and health care.

Health care is especially bad for us as we took a 20%+ beating last year and there is another +20% this year as we are no responsible to cover a bunch of individuals who previously were ineligible.

When i talk to my contemporaries, they all have the same issues. So at least in our neck of the woods, the growth is not there